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Biden's Asia policy

Biden urged to ditch bilateralism by scholars in Europe, US and Japan

Think tanks say US should immediately accept Okonjo-Iweala for WTO

U.S. President-elect Joe Biden campaigns on behalf of Democratic U.S. Senate candidates in Atlanta, Georgia, on  Dec. 15.   © Reuters

TOKYO -- Policy wonks from three continents are uniting to send U.S. President-elect Joe Biden a message, offering a set of proposals on trade designed to reverse the protectionism promoted by outgoing President Donald Trump.

Richard Baldwin, professor at the Graduate Institute of International and Development Studies in Geneva, has called on fellow researchers in the U.S., Europe and Japan to compile the document, which is expected to be released soon. It is unusual for a cross-border collection of think tanks to release such recommendations just before the presidential inauguration.

"Nations across the world are strategizing about how they can get the Biden administration to pay attention to their favorite issue, and to redress the bilateral harm done by Trump trade policy," the report will say.

But the authors argue that bilateral negotiations are not the best way forward. Noting that hundreds of bilateral deals made it unnecessarily hard to do business in the past -- the so-called noodle bowl effect -- they say that Washington should aim to form "a group of like-minded nations to deliberate and develop constructive and pragmatic initiatives that strengthen rules-based trade."

Biden has expressed his intent for the U.S. to regain its focus on international cooperation. This makes it imperative for Washington to address the trade frictions that have developed with friendly nations, the joint document will say.

"In particular, using a national security justification slapping tariffs on steel and aluminum from NATO allies [and Japan] was, and still is viewed as, particularly egregious, if not downright insulting," the draft report reads.

"Even if the offending measures are not removed immediately and unilaterally, the U.S. will have to provide a plan for removing them," the document continues. "Restoring multilateral cooperation means restoring trust, while a number of Trump-era policies continue to ruin the spirit of collaboration with otherwise like-minded U.S. trade partners."

The think tanks also recommend that Biden immediately confront the structural economic issues within China, such as excessive government subsidies granted to Chinese enterprises. Having friendly nations get together to create a dialogue with Beijing is one path.

"The January 2020 Joint Statement of Japan and the U.S. and EU showed that trade distorting policies and practices poses challenges to many nations, and that cooperation is possible," according to the draft report. "Call for a structured dialogue with China will be required down the road."

As the World Trade Organization prepares to elect its next director-general, the U.S. is backing South Korean Trade Minister Yoo Myung-hee over Ngozi Okonjo-Iweala, the Nigerian economist who has won majority support among members. Because the WTO usually picks new leaders by consensus, the Trump administration has essentially blocked the appointment process.

The think tanks want Biden to promptly withdraw support for Yoo and remove the obstacles keeping the WTO from installing a new leader.

Along with the institute in Geneva, the document is supported by the Peterson Institute for International Economics in Washington, Brussels-based policy group Bruegel and the Research Institute of Economy, Trade and Industry in Tokyo.

The think tanks identify additional issues for Biden to resolve in the medium term, such as the tit-for-tat tariffs affecting Boeing and Airbus, along with the digital services tax on tech companies.

The Biden administration is expected to focus heavily on climate change and stake a multilateral collaborative approach toward the problem.

"President-elect Biden clearly views restoration of multilateralism and American leadership as core to his administration," the draft report says. "This effort, however, will not involve a return to the traditional-style of U.S. leadership based on a trade-liberalizing agenda."

"U.S. trade liberalization per se is probably off the table until safety nets, adjustment policies, and innovation policies are in place and working well."

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